Big news out of Dearborn this morning: Ford has entered into a partnership with Rivian, the Michigan-based electric startup. As part of the agreement, Ford will infuse the company with $500 million, and get access to Rivian’s “skateboard” architecture. As a result, Ford will produce a Blue Oval product with Rivian underpinnings. This is a big win for both companies and a huge loss for GM, which had been in negotiations for some type of corporate tie-up with Rivian before talks broke down several weeks ago.
Details are scarce right now and we don’t know how Rivian will spend the cash or what type of vehicle Ford intends to make off the Rivian platform. But the company is definitely moving up in the world. This is the second infusion of cash Rivian has received, after Amazon led a round of investment to the tune of $700 million.
Rivian made waves last fall when it debuted its two vehicle lineup at the 2018 LA Auto Show. The pickup and SUV, named R1T and R1S, respectively, both have 400 mile range capacity with a three second 0-60 time in their top end trims, as claimed by Rivian. These are also the exact models customers will receive when their orders are fulfilled at the end of next year.
It’s possible we’ll get some behind-the-scenes look into how Ford and Rivian got together, but it’s entirely possible that Rivian CEO RJ Scaringe preferred Ford over GM, as the company was using its own fleet of F-150 pickups to test their batteries on public roads. Ford has already stated this new agreement will not alter their plans for the EV’s they have already announced, which includes a fully electric F-150 and an unspecified “Mustang inspired” utility vehicle to be revealed at a future date.
Does this amount to a coup from Ford? GM was reportedly in talks with Rivian but wanted an arrangement that hinged on exclusivity, and Rivian refused. Given the timing between the two announcements, it’s not hard to conclude that Rivian may have already been in talks with Ford and decided to simply choose the best deal, regardless of exclusivity.
The bottom line is that a relationship between Ford and Rivian has been firmly established. And their efforts will most likely be mutually beneficial for both companies. Ford can offer manufacturing expertise and quite possibly assemble Rivian products down the line. Rivian obviously has technology that Ford wants to incorporate into its own lineup. Whether that is the battery itself or the underlying layout of Rivian’s skateboard platform is anyone’s guess.
Another wrinkle to this whole EV partnership orgy is Ford’s recent alignment with Volkswagen. Ford will apparently build Volkswagen a midsize pickup based on the next generation Ranger while the German automaker will reciprocate by creating a new van for both companies. Both companies also expressed interest in mutually investing in autonomous vehicle and EV’s, and there was talk that Ford might use VW’s future MEB electric platform. VW recently invested just under $2 billion into Argo, Ford’s autonomous vehicle unit, but there has been no news about the two companies sharing any EV technology.
It’s a tumultuous time for the auto industry, as each company has to spend significant cash and resources on technology that won’t go mainstream for several more years. Ford’s endorsement of Rivian is a huge boost for the company, which seems poised to rival Tesla. It will be interesting to see how Rivian’s significantly different approach to fundraising and vehicle manufacturing affects its development when compared to the path Elon Musk chose for his company. For now it seems Rivian will get by with a little help from its friends.
This is why after decades of loyalty to GM……….i have had it with their stupidity. This Rivian truck and SUV are a nice fresh tack on both body styles, seem to have capable mechanicals and electrics………….and GM passes on this. Ford is smart to pick up on this. With this drivetrain……….Ford more than cements the lead of the F150. GM is just stupid. I have no more sympathy for these morons. They have destroyed Cadillac cheapened all they could get there hands on, they are an embarrassment to themselves and to domestic car lovers. Well i’ll leave some room for the Corvette.
I gave up in GM about thirty years ago. They are a backwards looking company. They are still in the muscle car era, mentally, because their senior management is all baby-boomers. When they saw Toyota hybrid tech, they thought in the short term: “We can’t make money on that today, so it is a worthless technology.” Well, two decades on Toyota is a behemoth and GM an also ran.
Do you know why the GM talks broke down?
Didn’t think so, can’t blame you because it’s not here, and neither is it on The Truth About Cars.
But Peter DeLorenzo has it, and one click at the bottom of the Freep piece takes you to the reason: GM wanted exclusivity, while Rivian wants to share the tech with anyone.
Here are the links: https://www.freep.com/story/money/cars/general-motors/2019/04/19/gm-rivian-electric-truck/3508345002/
http://www.autoextremist.com/on-the-table1/2019/4/24/april-24-2019.html
I thought Ford was already investing billions in their own designs? This surprises me.
It will be interesting to see where Rivian goes. They have some really neat and innovative features. But a lot of them, combined with the price, make it appear like they have no interest in mass production. Perhaps their business plan is to sell technology?
With the tie up with Ford, Rivian has the ability to get into mass production. This will bring prices way down as will the drop in battery prices over time.
Selling technology highly profitable.
“… technology that won’t go mainstream for several more years.”
I would add “if ever” to the end of that sentence. It’s not yet clear that that a combination of machine learning/AI, mapping, sensors, etc. will ever provide all the pieces needed to solve the autonomy problem. And while BEVs have a head-start vs. other alternative fuel technologies, a lot of automakers (especially Toyota) are still making side bets on hydrogen.
The risks of both action and inaction are huge, and much of the billions being invested today will be viewed as folly by the Monday morning QBs of the future.
It’s easy to be pessimistic, and I understand how one can feel that way about technology and the future, but if anyone puts enough time, money, and effort into solving a problem, it can and will be solved.
Our space race in the 1960s, culminating in the 1969 lunar landing, was thought impossible by many. However, the people working on the project did not give up, despite several failures and setbacks, and overcame the obstacles and prevailed. We seem to have that sort of will in solving the autonomy issue, and we definitely have that will in creating an EV based automotive future. In the end, it does not matter if the energy is created with hydrogen, or stored in batteries, or co-generated with an ICE until we find a permanent solution.
We spend billions today on things that have no impact, and most investments are folly in the end, regardless.For example, I would rather see Ford investing $500 million on a side bet than spending that amount to sponsor a NASCAR race. I think that we will see more and more tie-ups like this, and kudos for Ford outsmarting GM in this endeavor.
I wasn’t there at the time but from what i know it seemed like the public at large was more excited about landing on the moon than it is on autonomous vehicle tech. Most people look at it as a silicon valley pet project and/or fear the ramifications of the associated AI.
What I don’t understand is how EV and AV development became joined at the hip. It’s a polarizing gimmick that glosses over the actual important accomplishment of making electric vehicles that finally work. Autonomy is just an elaborate extension of cruise control, there’s nothing that would prevent its application to conventional ICE cars
AV and EV are combined because they make vehicle pooling practical, and that’s a big potential business. As you point out, Super Duper Cruise Control is just an incremental improvement to a privately owned personal transportation vehicle exc for some edge cases who would be able to use an automated private vehicle (very young, very old, blind, uninsurable etc).
EV/AV combined enables a new business of pooled personal transportation without significant labor costs to move vehicles between customers. It could work just with ICE vehicles, but pooling capitalizes on the advantages of EV without the problem of using the same privately owned EV for both short and occasional long trips. EVs already are at the point where they could easily be the majority of such fleets.
That’s the end game for Lyft, Uber etc.
They didn’t become joined at the hip, but they are often brought up together because automakers have to spend significant amounts of money on them with little to no short term benefit. And that situation is leading to new alliances being forged, like today’s news.
I think you got it right there. They are separate but long term goals. Press releases are not for our benefit, but for Wall Street.
I don’t get it either. There’s nothing about an EV that makes it a better autonomous platform than an ICE vehicle. EV adoption is real, and following a solidly exponential growth curve. Wide adoption of autonomous vehicles is over hyped and much further away than many people think.
Former head of MIT’s AI Lab, Rodney Brooks, wrote an article called “The Big Problem With Self-Driving Cars is People” that’s filled with common sense about how hard it will be for society and autonomous cars to adapt to each other.
You are correct that there is just not a public will to get fully autonomous vehicles. That push, as stated by others, is from Uber, Lyft, and the like, whose business model only works when they no longer have to pay drivers.
In a way, the OEMs are pushing EV development harder than anyone. It does make a bit of business sense, as once established, an EV relies more on assembling parts from third party developers than engineering a full vehicle. That saves money, time, and effort that can be spent on styling and marketing the vehicle rather than coming up with the whole car. Computer companies did this switch years ago, and they leave the chip development to those producers and just make their laptop look a bit different from the next one. You can add performance to any of them by choosing a different chip.
And yes, the AV and EV situation is being discussed as both rely on the other’s success to move forward. That is total BS.
I’m always curious when I see Rivian called a truck maker, since they haven’t made anything yet. I hope Ford is doing the right thing here, and Rivian isn’t an automotive Theranos.
Yeah, my thoughts also. How much you wanna bet someone at Rivian is getting a new swimming pool?
Not until Rivian goes public or gets acquired by a public company. Until then the company is “privately held” and its shares can’t be cashed out by individual employees. These matters are heavily regulated by the US federal government. Investors take a dim view of fat salaries, so the startup experience is pretty lean until there are salable shares one way or the other.
Rivian has built multiple prototypes that are driving around the country. You can bet that public-company investors like Amazon and Ford have been through those prototypes and their technology and business plan with a fine-toothed comb.
Theranos raised money from clueless rich people like the Walmart heirs and Betsy DeVos, who were snowed by hype and reputation and never looked behind the curtain.
The front of a Rivian is when a Renault 10 meets up with a Ruxton. Not that I hate it, its just what it reminds me of.
It still reminds me of Little Orphan Annie.
I wonder why GM walked, Rivan looked like a prize. One has to wonder what was in the deal that was toxic to GM but was agreeable to Ford, assuming it was a similar deal. If the contention was over exclusivity, what did Ford really get? Ford seems to be rather desperate in the BEV field while GM is making some progress, and Hackett is under considerable pressure to do ‘something’. In any event, this agreement may help Ford’s dire situation in China.
Bob,
Like over on The Truth About Cars, Edward left out the critical detail why the talks with GM broke down.
GM wanted exclusivity, Rivian didn’t. At least Peter DeLorenzo had it right in his Autoextremist blog.
http://www.autoextremist.com/on-the-table1/2019/4/24/april-24-2019.html
https://www.freep.com/story/money/cars/general-motors/2019/04/19/gm-rivian-electric-truck/3508345002/
No I didn’t:
“GM was reportedly in talks with Rivian but wanted an arrangement that hinged on exclusivity, and Rivian refused.”
I even included a link to the article.
Good for GM, they should have walked. I don’t think they are as stupid as they once were. Good luck, Ford.
Exactly. Why would GM invest a half billion in Rivian without an exclusivity agreement? Well, I can see why, but they probably had disagreement over control of future licensing.
If you’ll remember, they had a buyer for Saab, but in the end just walked away due to intellectual and technology property rights.
No, GM made yet another colossal error. Ford and Amazon have invested minimal amounts for companies of their size and will reap much more than they risked.
GM has a nasty habit of being overbearing and having no good sense of how best to handle a brand, especially one that does not fit into their mode of thought. Saab is a good example. They did things differently, and when given shared cars, they tweaked them to their own standards, ending up with better versions. GM wanted Saab to be ‘dumbed down’ and use GM corporate bin parts. It diluted what made Saab – Saab. If GM would have got hold of Rivian, we would just see it morph into a EV Silverado that doesn’t work as intended.
Rivian dodged a bullet.
The cynic in me says Ford is trying to hedge all their bets to keep their truck only house of cards standing in the face of any possible adversity, VW and now Rivian may just be the krazy glue needed to succeed. Plus with Rivian’s seemingly unanimous positive press it has received(I don’t get the buzz myself, but this isn’t my niche), the ford truck company surely would like a piece of their possible success after all the established automakers missed the runaway train of Tesla.
Rivian itself probably strived for this outcome as well, the styling of this thing resembles the F series styling to my eye, probably not a coincidence.
I am curious as to exactly what Rivian brings to the table in their tie-up with Ford. The obvious-seeming answer – an electric pickup truck – is also obviously wrong. Ford needs no help in making pickup trucks and frankly I can’t imagine that there will be more than a niche market for electric pickups. I suspect that Rivian chose to market themselves as truck makers to simply to stand out in the crowd of electric car startups clamoring for attention in the press.
A glance at Rivian’s website ( https://www.rivian.com/technology ) suggests that the answer for their success in attracting financing may (must?) be in their autonomous vehicle systems. These seem to be quite sophisticated. I would guess that the tie-up with Ford will allow them to drop their truck-engineering efforts and focus on these systems.
The next question in my mind is “what does this mean for Tesla?”. Their first-mover advantage in electric vehicles is beginning to fade as other companies enter their market niche. Will the entry of these other companies dilute market-shares of all of them or will they help to grow demand? My guess is that Tesla is going to have to be first-to-market with a true (or damn-near-true) autonomous driving system or they will begin to fade. There is not a lot else Tesla can do to update or upgrade their vehicles. Styling changes or interior upgrades are not going to be sufficient.
Ford most likely finds Rivian’s battery tech and EV platform attractive. It’s also possible that Rivian developed a sophisticated AWD system or something else entirely. Ford might also benefit by having access to Rivian’s engineers. And if the relationship goes well, there could be a closer tie up that helps Rivian save on R&D costs.
Rivian definitely gets a lot out of the deal as well. They’re going to need a dealer network, and their tie up with Ford allows them access to thousands of dealers across the country. With Amazon in the mix, you could theoretically order a Rivian on their site and go through the delivery process at a local Ford/Lincoln dealer.
Excellent point about dealers.
Tesla are building a body style that is dying, but are selling their cars because of the tech and hype/cachet.
Rivian is building a body style that is thriving. Seems like a good entrée point.
Ford’s press release pretty clearly lays out what they are looking for out of this investment, and that is the “skate board platform” to put their body on though it will not be a pickup anytime soon since their F-150 EV is already on its way and they will almost certainly be on the market before the Rivian as will Ford’s Mustang Inspired EUV.
This is great news. Rivian is credible and conservative, from founder RJ Scaringe (MIT Mech Eng PhD) on down. They’ve developed two products which will be more attractive to the truck market than Tesla’s more radical approach. A super fast super powerful truck that looks the way truck buyers expect a truck to look is going to find a solid market.
Ford and Rivian together can make a lot of good things happen, at the truck end of the market, where EVs can have the greatest carbon impact. Lots of good profits in the truck market too.
Rivian certainly does have production capacity, in the ex-Mitsubishi plant they bought for a song. It’s common for a tech startup to develop and sometimes even share technology first, while ramping up to volume production over time. I expect the Ford tie-up just helps them move along their timeline to market.
I think GM feels better positioned in EVs than their competitors do, thanks to their long collaboration with LG and production experience with Volt and Bolt. GM deserves credit for delivering volume numbers of real hybrids and EVs. Maybe Ford just needs to partner with Rivian more than GM does.
Nobody’s even mentioned FCA, even though RAM trucks are big sellers. Their excellent Fiat 500e is totally at the opposite extreme of a big truck. FCA has a lot of catching up to do.
This deal makes perfect sense from a variety of angles.
Reportedly, the talks between Ford and VW wrt EVs broke down because Ford wants big trucks and SUVs that are relevant in it’s core North American market, while VW wants to focus on smaller vehicles that are relevant in it’s core European market.
Rivian has not only invested a pile in product development, but also bought the former Mitsubishi plant in Normal, IL, and is looking to leverage these investments by building vehicles under contract for other companies.
Ford is moving to a marketing company model for non-core products and geographic markets. Future Fords in India will be rebadged Mahindras. Their best seller in China last month was the Territory SUV, which was entirely designed and is produced by Jiangling. The next gen Ford Transit Connect will be a rebadged VW Caddy. Makes perfect sense for Ford to badge engineer Rivian products for what is, at this time, a niche market for EVs.
Rivian’s pickup and SUV badged and sold as Lincolns would get some attention. I can totally see Matthew McConaughey behind the wheel.
Is Rivian the future of Lincoln?
“That’s what I love about these EV’s, man. I get older, they stay at the same range. Alright, alright, alright!”
Ford will not be rebadging Rivians they will be using the platform for their own unique bodies.
Ford will not be rebadging Rivians they will be using the platform for their own unique bodies.
The local Detroit media has been nattering about this all day. Their script has consistently talked about “Ford branded” vehicles, not “Ford” vehicles. There is a difference. A “Ford” vehicle implies the majority of the design and construction were executed by Ford. A “Ford branded” vehicle is something designed and built by someone else, with a blue oval pasted on it. The Festiva and Aspire, built by Kia, using Mazda technology, with a blue oval pasted on them for the US market, were “Ford branded” vehicles.
This is exactly the term used last January when Hackett was asked about Ford’s future, or lack thereof, in Europe.
Hackett suggested that a competitor like VW could build Ford-branded products in Europe,
“As it relates to Europe, this is not just a new problem,” Hackett said. “We think there’s a design in the future that allows us to be there with Ford-branded products.
While Ford has designated Flat Rock as it’s EV plant, I would expect the “Ford branded” EVs to be built at the Rivian plant until, or unless, volume builds to the point where it would be cost effective for Ford to bring assembly in house. While the Rivian built Fords may have some “distinctive styling elements”, I would expect them to be little more than badge engineered Rivians, because that is the way Hackett is moving in non-core products and markets.
Here is the link to the article where Hackett talks about sticking a blue oval on VW product.
https://www.bloomberg.com/news/articles/2019-01-14/unhappy-with-ford-s-performance-ceo-looks-to-rival-for-relief
Ford EVs are going to be rolling out of Ford factories and into showrooms before Rivian starts production at their factory.
You were right, Scoutdude:
“DETROIT (Reuters) – A battery-powered Lincoln SUV, due in mid-2022, will be the first Ford Motor Co vehicle built on a custom electrified chassis that resembles a skateboard, which was developed by Ford-backed startup Rivian, according to several people familiar with the program.”
I don’t know what Ford tries to achieve from Rivian. If it thinks it can use the propulsion technology from Rivian, why doesn’t Ford do this on its own? With a bit more than that amount, it can acquire the propulsion business from beleaguered Toshiba motor operations. Toshiba has a well established motor and inverter setup, it is known to be most reliable motor in the industry, it also has next generation of permanent magnet AC motor driven with silicone carbine technology. This will resolve the power train system, the next step is to set up contact with Chinese lithium battery makers to secure the long term supply of battery. Then it can concentrate on its core vehicle business
I don’t know what Ford tries to achieve from Rivian. If it thinks it can use the propulsion technology from Rivian, why doesn’t Ford do this on its own?
The half a Billion Ford is shelling out is about what it would take for the production tooling, alone, for a new model.
The way Ford is doing it, Rivian is taking all the risk, doing all the heavy lifting of developing the thing, organizing the plant and supply chain. Rivian has been working on this for 10 years. Rivian bought the Mitsubishi plant in January 2017. Their truck and SUV are almost production ready. All Ford has to do is slap a blue oval on the trucks when they come off the line.
Ford will not be slapping a blue oval on the Rivian pickups, they have been working on the EV-150 for many years as well, have actual prototypes doing testing and they will roll off of the same assembly line as ICE, Hybrid and Plug in Hybrid F-150s within a year.